07/07/2011

The 1.1 Million Dollar Gift Card Ponzi Scheme

You read the title correctly. A Columbia, South Carolina woman has plead guilty to a "gift card ponzi scheme" which defrauded her victims out of $1.1 million.

Annette Marie Benson was in the business of selling discounted gift cards. The gift cards were real and discounts ranged from 20-50% off the face value; demand for her product was high.

Apparently, Benson would pay face value for the gift cards, sell them at a discount and then cover the losses with incoming money from new customers/victims. Naturally, there must have been a time-laps between when Benson collect money for the discounted gift card to when she actually bought the gift card at the full value.

Eventually, Benson could not cover the losses and the ponzi scheme collapsed. She faces up to 20 years in prison.

Tip: Only Buy Discounted Gift Cards From a Reputable Company

ScripSmart recommends staying away from buying gift cards directly from an individual seller. Especially given the fact there are several companies in the secondary gift card market who offer a solid track record, free shipping and transaction guarantees. The same can't be said for Benson's business or any other individual sellers.

In fact, ScripSmart checks the inventory several times each day of two such companies: Cardpool and Plastic Jungle. We then display the results next to each gift card review. For example, if you're looking at the Home Depot Gift Card review on ScripSmart, you'll see Plastic Jungle is offering 6% discount and Cardpool is offering a 8% discount. Just look for a 'Gift Card Deals' section on the left hand side.

We like Cardpool and Plastic Jungle because they offer free shipping, transaction guarantees and have a solid track record of delivering on their promises. Remember, whether buying directly from the merchant or for the secondary market, check the Gift Card Score before making your next gift card purchase to ensure you're getting a quality product.

Comments

You read the title correctly. A Columbia, South Carolina woman has plead guilty to a "gift card ponzi scheme" which defrauded her victims out of $1.1 million.

Annette Marie Benson was in the business of selling discounted gift cards. The gift cards were real and discounts ranged from 20-50% off the face value; demand for her product was high.

Apparently, Benson would pay face value for the gift cards, sell them at a discount and then cover the losses with incoming money from new customers/victims. Naturally, there must have been a time-laps between when Benson collect money for the discounted gift card to when she actually bought the gift card at the full value.

Eventually, Benson could not cover the losses and the ponzi scheme collapsed. She faces up to 20 years in prison.

Tip: Only Buy Discounted Gift Cards From a Reputable Company

ScripSmart recommends staying away from buying gift cards directly from an individual seller. Especially given the fact there are several companies in the secondary gift card market who offer a solid track record, free shipping and transaction guarantees. The same can't be said for Benson's business or any other individual sellers.

In fact, ScripSmart checks the inventory several times each day of two such companies: Cardpool and Plastic Jungle. We then display the results next to each gift card review. For example, if you're looking at the Home Depot Gift Card review on ScripSmart, you'll see Plastic Jungle is offering 6% discount and Cardpool is offering a 8% discount. Just look for a 'Gift Card Deals' section on the left hand side.

We like Cardpool and Plastic Jungle because they offer free shipping, transaction guarantees and have a solid track record of delivering on their promises. Remember, whether buying directly from the merchant or for the secondary market, check the Gift Card Score before making your next gift card purchase to ensure you're getting a quality product.